Is this the “October Curse”?

Next Wednesday is Halloween, a thrilling night of ghouls and goblins. For investors, the greatest bogeyman isn’t what goes “bump” in the night but rather what goes “bust” in a bear market. Historically, October has been “spooky” for the markets. Many of the largest stock drawdowns – such as the 86.1% decline of the Great Depression (10/24/1929), the 33.5% tumble around Black Monday (10/19/1987), and the 56.4% loss in the “Great Recession” (10/11/2007) – all began in October [1]. And with the Dow Jones shedding over 600 points and the S&P 500 dipping over 3% in one day (10/24/2018), this “October curse” seems to be coming true [2].

Instead of letting these numbers spook us, however, make this a lesson in patience by remembering the long-term strength of the stock market. While no one has a “crystal ball” to predict returns in any year or couple of years, history has shown that the U.S. market always comes roaring back. Stick to your long-term allocation, regardless of the day-to-day noise. As the old saying goes, “good things come to those who wait.”

Click here for an article with more information on Black Monday and the “October curse”.

 

[1] http://www.nbcnews.com/id/37740147/ns/business-stocks_and_economy/t/historic-bear-markets/#.W89H4GiPKUk

[2] https://www.marketwatch.com/story/stock-plunge-leaves-sp-500-dow-negative-for-2018-nasdaq-in-correction-territory-2018-10-24

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